March 04, 2014

Russia has gas...

'...and the threat it poses to the rest of Ukraine, could have on the
continent's supply of natural gas. But past is not always prologue -- and while
Russia has used natural gas as a cudgel scores of times since the end of the
Soviet Union, its ability to cow Europe by withholding energy exports is not
what it used to be. In fact, Russia and gas giant Gazprom depend as much on
Europe as Europe does on them.

'Natural gas prices in Europe rocketed Monday as the military
and diplomatic standoff in Ukraine escalated. Officials from Ukraine's gas
company said Monday that there have been no physical supply disruptions since
the Russian military incursion into Crimea, but gas prices jumped 10 percent in trading
in the U.K. and the Netherlands, and more than 8 percent in Germany. Traders
focused on a pair of simple facts: Russia's gas exports to Europe reached record highs in 2013, and
about half of that was shipped through transit pipelines that crisscross
Ukraine.

'Worries over the fate of those natural gas
supplies are certainly understandable. Russia has shown in the past twenty years
how eager it is to use energy exports as a weapon, cutting off gas supplies at one
time or another more than 40 times. Russian neighbors such as Belarus,
Lithuania, Moldova, and Azerbaijan have all faced threats of Russian energy
cutoffs as they flirted with pro-European policies in the past few years.
Lithuania's prime minister accused Russia of waging "economic
war" last September after Moscow threatened gas supplies and
interfered with cross-border trade, apparently to punish the Baltic country for
seeking closer ties with other EU countries.'